GST notification on force majeure time extensions faces legal challenge over Section 168A inconsistency

The Gauhati HC examined a challenge to Central Board of Indirect Taxes and Customs Notification No. 56/2023 dated 28.12.2023 regarding force majeure interpretation for extending time limits under CGST Act, 2017. The Court held that the notification prima facie appears inconsistent with Section 168(A) of the Central GST Act, 2017. Finding the notification may not withstand legal scrutiny, the Court granted interim protection to petitioners, restraining coercive action based on the impugned assessment order dated 23.04.2024 until further hearing. Respondents were directed to file affidavits by 15.09.2024.

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Issues:
Challenge to the issuance of a Notification by the Central Board of Indirect Taxes and Customs under Section 168A of the CGST Act, 2017 without a recommendation from the GST Council. Interpretation of the term "force majeure" in relation to the extension of time limits for passing orders under the CGST Act, 2017. Applicability of the Notification bearing No. 56/2023 dated 28.12.2023 to the Assam GST authorities. Examination of the validity of the impugned assessment order dated 23.04.2024 in light of the ultra vires Notification.

Analysis:
The petitioners challenged the Notification issued by the Central Board of Indirect Taxes and Customs under Section 168A of the CGST Act, 2017, citing the lack of a recommendation from the GST Council, which is a mandatory requirement for such extensions. The petitioners argued that the Notification No. 56/2023 dated 28.12.2023 extending time limits for passing orders under the CGST Act, 2017 was ultra vires as it lacked the necessary recommendation from the GST Council, as per Section 168A. The petitioners contended that the extension was not justified as the reasons provided, such as lack of manpower due to the COVID period, did not constitute "force majeure" as required under the law.

The petitioners further argued that the Assam GST authorities could not rely on the same Notification (No. 56/2023) as it was ultra vires the CGST Act, 2017, and the Assam GST Act, 2017 did not provide for a similar extension. The impugned assessment order dated 23.04.2024 was challenged on the grounds of the invalidity of the extending Notification and the lack of a corresponding notification under the Assam GST Act, 2017. The respondents, on the other hand, defended the Notification by stating that steps were being taken for GST Council ratification and pending amendments through a new Finance Bill.

The Court observed that prima facie, the Notification No. 56/2023 appeared to be inconsistent with Section 168A of the CGST Act, 2017. Consequently, the Court granted interim protection to the petitioners, restraining coercive actions based on the impugned assessment order until the next date. The respondents were directed to file their affidavits by a specified date for further proceedings. The judgment highlighted the importance of compliance with statutory provisions and the potential repercussions of actions taken based on an ultra vires notification.

This comprehensive analysis of the judgment showcases the legal arguments, interpretations, and the Court's decision regarding the challenges raised by the petitioners against the Notification and the subsequent assessment order.

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